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Define the monopoly of Central banks
The central bank has a monopoly on issuing currency, it is in complete control of the monetary base. In section 7.4.2 we will describe exactly how they change the monetary base. However, the central bank does not completely control the money supply. This is due to the second component of the money supply - bank deposits - which it cannot control. Fortunately, it has methods of influencing the total money supply
.Clearly explain how net foreign investment links the market for loanable funds and the market for foreign currency exchange. Make sure you define net foreign investment in your an
Functions of a Commercial Bank 1. Credit Creation Creation of credit is a major function of a commercial bank. When a bank creates credit or advances loans, there tends
You are the mayor of a beautiful city by the ocean, and your city is connected to the mainland by a set of k bridges. Your city manager tells you that it is necessary to come up wi
illustrate the effects of a reeal wage existing in the labour market if it is perfectly competitive
What is fixed cost and variable cost? By the Production Function to Cost Curves: A fixed cost is a cost which does not depend onto the quantity of output generated. This i
using a graph of the classical labour market,illustrate the effects of a real wage existing in the market that is lower than the equilibrium real wage.what will eventually happen i
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An economy shows the following features C=50+0.9(Y-T) T=100 I=100-5i G=100 L=0.2Y-10i M/P=100 X=20 M=10+0.1Y a)Obtain the IS and LM for this economy b)Find out the equilibrium inc
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